In the past few months costly maize, the main ingredient of poultry feed, increased the cost of production, with the result that farm-gate prices of poultry increased around 20% year-on-year.

Kochi: Poultry prices may shoot up in the coming months as the industry looks to cut production to pare losses arising out of high feed cost.

In the past few months costly maize, the main ingredient of poultry feed, increased the cost of production, with the result that farm-gate prices of poultry increased around 20% year-on-year. However, prices eased from the middle of July with the onset of auspicious Shravan, the fifth month in the Hindu calendar, as consumption decreased.

Farm-gate poultry prices have dropped to around Rs 62 per kg. “The average cost of production for a poultry farmer is around Rs 75. With consumption falling around 30%, farmers have no choice but to prune output, which could raise poultry prices in the coming months,’’ an executive of Broiler Coordination Committee at Palladam in Tamil Nadu, which fixes broiler chicken prices in southern India, told ET on condition of anonymity.

GB Sundararajan, managing director of Suguna Poultry Farms, said: “The cost of production has gone up 20%. Besides, the hot summer affected bird growth, resulting in supply shrinking 15-20% in the first quarter of 2019-20.’’

High poultry demand had offset the increase in feed cost during the quarter. “The second quarter is generally a lean period and we expect demand to pick up in the third quarter,’’ said Sundararajan.

Both maize and soybean used in poultry feed have seen an uptick in prices this year. “Maize prices have doubled from last year to Rs 26-27 per kg while soybean prices increased around 40% to Rs 37 per kg,’’ said Sasi Kumar, director of Ravi Poultry Farms in Tamil Nadu. Both egg and chicken farmers are operating at a loss now, he said.

Kumar said the poor maize crop, especially in the southern states owing to a pest attack, pushed prices up. “The government had decided to float a tender for maize import from Russia and Ukraine to boost supply. But that has been delayed. The harvest is already over in those countries and prices are rising,’’ he said.

The industry expects maize prices to fall by October, when the next harvest is due.